Amazon

Aaron Bowen, Catie Hornyak, Jacqueline James, Gabi Paradiso

About Amazon

● Founded by Jeff Bezos, July 5th 1994

● Revenues of $75 billion in 2013o 65.5% electronics and general merchandise

o 29.2% media

o 5.3% other

● Main competitors: eBay, B&N, Walmart

How Amazon makes its money

● General merchandise sales and revenues

from vendors

● Kindle e-book, Fire phone

● Prime instant video

● Services: web services, order fulfillment,

and co-branded credit cards

SWOT AnalysisStrengths:

● largest online retailer

● strategic acquisitions have increased

its technical platform

● constantly extending its product line

● Kindle has a presence in eBooks

Weaknesses:

● frequent outages of cloud computing

and web hosting services

● patent infringement issues

Opportunities:

● increase in online retail sales

● growing online display advertising

business

● growing eBook and tablet sales

● growing demand for cloud computing

services

Threats:

● pressure to collect sales tax on online

sales

● competition in the e-reader market

Do you believe that Amazon’s decision to

branch out from its general merchandise

sales to include various web services and

order fulfillment will enable it to become

an even bigger player in the tech world, or

is the company spreading itself too thin?

Discussion Question

Benefits of Amazon Prime

● Free two-day shipping

● Prime Instant Video

● Prime Music

● Prime Photos

● Prime Pantry

● Kindle First

More Benefits of Amazon Prime

● Membership Sharing

● Students get a free 6-month trial

How Effective is Prime?

● Prime account holders shop twice as

much as regular customerso Spend twice as much annually

$1340 vs. $650

● Approx. 40 million members worldwide

Amazon Prime Air

https://www.youtube.com/watch?v=98BIu9

dpwHU

● Do you think Amazon air is an applicable

method for expedited delivery?

● What are some other benefits amazon

can provide for their prime members?

Discussion Questions

How Amazon Uses Big Data● What is Big Data?

o Massive sets of information that exceed the processing capability

of regular database systems

o Use analytical tools to mine data into useful material for

companies

● 152 million customer accounts

o customer recommendation system

click-stream data

historical purchase data

customization

● New project regarding packaging information

o increasing advertising revenue

How Amazon Uses Big Data● Customer Relationship Loyalty

o prepares customer service

representatives

o personalized service helps

retain customers

● Amazon Elastic MapReduce

o newly installed analytics

platform

o monitor, track, secure 1.5

billion items in fulfillment

stores around world

o stores and updates

product catalogue data

● Trying to solve the biggest

disadvantage of e-commerce

● Patent for algorithm-based system

o ship products before order is

placed

o increase sales, reduce costs

● Using data from prior Amazon

activities

● https://www.youtube.com/watch?v=F

kNfnjkDFxQ

Anticipatory Shipping

Do you support Amazon’s use of data to tailor

their services to you personally? Do you feel as if

this is an invasion of privacy and would require

your permission before Amazon could access your

information?

Discussion Question

● Those invited to

become Amazon

Vine reviewers

receive free things

in exchange for

online reviews

Amazon Vine Viewer

● Enables users to crowdsource human intelligence tasks

to people all around the world

Mechanical Turk

● Available in select cities: NYC, Seattle, London

● Packages dropped off at secure, public, 24-hour locations such as 7-

Elevens

● Enter code received via text to access storage locker

Amazon Locker

● Allows you to take pictures of products on your

smartphone and then automatically adds that product

to your Amazon shopping list

Amazon Flow

Managerial Implications

● Information systems are seamlessly aligned with

Amazon’s organizational structure

● Together they allow Amazon to achieve their mission:

“to be Earth’s most customer-centric company, where

customers can find and discover anything they might

want to buy online.”

● Making shopping as easy and seamless and possible